Colonial Pipeline closes its facilities west of Lake Charles, La.

The Colonial Pipeline Company announced that its Colonial facilities west of Lake Charles, La., are temporarily out of service due to Hurricane Harvey.

“Once Colonial personnel can safely access these facilities, we will evaluate and provide an estimate of the time necessary to ensure our pipe, pumps, tanks and related infrastructure are safe to resume operations between Houston and Lake Charles,” the company said in a statement.

The company further stated that due to supply constraints caused by storm-related refinery shutdowns, the impact to Colonial’s facilities west of Lake Charles, the company suspended Colonial’s Line 2, which transports primarily diesel, and aviation fuels, as of August 30. Colonial also expects that Line 1, which transports gasoline and is currently operating at reduced rates, will suspend service August 31.

Colonial Pipeline Map

Wood Mackenzie commented that these closures are a “major disruption to the U.S. East Coast, therefore buyers are scrambling for supplies.” Analyst, Alan Gelder, Wood Mackenzie vice president research, further stated that the volume that the pipeline transports is equivalent to Europe’s gasoline exports, making the volumes difficult to replace and will require supplies from distant regions if the outage is prolonged.

"At the peak of the disruption, 4.5 million bpd of refining capacity was shutdown - 50% more than was lost due to Hurricane Katrina. We estimate that 2 million bpd of gasoline and 1.4 million bpd of distillates have been lost in the USGC. The key uncertainty is the duration of the outages though we do hear good news that 1million bpd of capacity is being restarted in the Corpus Christi area. This is a positive boost for Atlantic Basin refining margins."

Once the company ensures that its facilities are safe to operate and refiners in Lake Charles and points east have the ability to move products to Colonial, the system will resume operations.

Thirteen refineries, of the 26 that connects to the Colonial system, are located between Houston and Lake Charles.

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